"Some of that is fair, and some of that is unfair, but it adds up over time," says Weiss, a senior lecturer at Harvard Business School who has created a new MBA course, Public Entrepreneurship. "The course allows students to consider the alternative that government can work—or they can help make it work."

“We have many talented people in government, but by and large they have tended to be analysts and strategists, rather than inventors and builders”

Once chief of staff to the late Boston mayor Thomas Menino, Weiss isn't just engaging in wishful thinking. He's seen firsthand how entrepreneurs within government can cut through red tape.

Weiss co-founded the Mayor's Office of New Urban Mechanics, which among other projects produced the nation's first big-city 311 app that allows citizens to alert government to potholes and graffiti. He also helped cut through zoning laws to create the Boston Innovation District on a vast and underdeveloped swath of waterfront in South Boston, attracting hundreds of startups.

And when the 2013 Boston Marathon was attacked, Weiss helped establish the One Fund within 24 hours to serve as a central pool for donations to victims. "The One Fund ended up channeling $60 million to survivors and to the families of the victims in 75 days. That speed is virtually unheard of," says Weiss.

Not that producing such results comed easy. As One Fund was being established, the IRS determined that the organization was not eligible to receive nonprofit status—which meant donations would not have been tax-deductible and likely caused many potential donors to not contribute. "The One Fund team made it known we would proceed without nonprofit status rather than agree with its finding," Weiss remembers. "Eventually, the IRS found a way to grant the status."

Innovation Laboratories

In the past five years, cities around the world have increasingly become laboratories in innovation, producing idea labs that partner with outside businesses and nonprofits to solve thorny public policy problems—and along the way deal with challenges of knowing when to follow the established ways of government and when to break the mold. States and federal government, too, have been reaching out to designers, engineers, and entrepreneurs to help redo their operations. The new US Digital Service, for example, follows other federal efforts like 18F and the Presidential Innovation Fellows to streamline government websites and electronic records—adapting from models in the UK and elsewhere.

"We have many talented people in government, but by and large they have tended to be analysts and strategists, rather than inventors and builders," says Weiss, who hopes his course can help change that. "One reason we didn't have them is we weren't training them. At policy schools we had not been training people to be all that entrepreneurial, and at business schools, we were not prepping or prodding entrepreneurial people to enter the public sector or even just to invent for the public realm."

“Government should be naturals at crowdsourcing”

Government entrepreneurship takes many forms. There are "public-public entrepreneurs" who work within government agencies, as well as "private-public entrepreneurs" who establish private businesses that sell to government agencies or sometimes to citizens directly.

In Philadelphia, for example, Textizen enables citizens to communicate with city health and human services agencies by text messages, leading to new enforcement on air pollution controls. In California, OpenCounter streamlined registration for small businesses and provided zoning clearances in a fraction of the usual time. In New York, Mark43 is developing software to analyze crime statistics and organize law enforcement records. And in Boston, Bridj developed an on-demand bus service for routes underserved by public transportation.

The innovations are happening at a scale large enough to even attract venture capital investment, despite past VC skepticism about funding public projects.

"There was this paradox—on the one hand, government is the biggest customer in the world; on the other hand, 90 out of 100 VCs would say they don't back business models that sell to government," says Weiss. "Though that's starting to change as startups and government are starting to change." OpenGov received a $15 million round of funding last spring led by Andreessen Horowitz, and $17 million was pumped into civic social-networking app MindMixer last fall.

Doesn't Need To Be Perfect

Governments could attract even more capital by examining their procurement rules to speed buying, says Weiss, giving them that same sense of urgency and lean startup practices needed to be successful in entrepreneurial projects.

"In government we announce something and wait to get it perfect. By using more experimental approaches, some public leaders are achieving success by testing and learning instead of writing a plan in stone before executing it."

In the HBS case study More Citizens Connect, Weiss details some of the learning challenges involved with Citizens Connect, the 311 app produced for Boston. After the successful rollout in that city, project creators Chris Osgood (Harvard MBA 2006) and Nigel Jacob, faced the challenge of scaling it to serve other cities in Massachusetts. Along the way, they ran smack into state procurement rules that forced them to open the contract to other bidders.

As with the IRS and the One Fund, sometimes entrepreneurs question the rules and push on barriers to achieve results. "But we must wrestle with the downsides of that, too," says Weiss. "On an individual basis, it might seem OK to say this rule doesn't make sense, so we won't follow it, but at what point does this practice become a problem?"

One company running afoul of the rules is private taxi-on-demand service Uber, which has disrupted the highly regulated and often inefficient taxi industry, and expanded to hundreds of cities worldwide. At the same time, the company has been criticized for "surge pricing" that jacks up rates during rush hours, as well as its lack of background checks on drivers and alleged evasion of local taxes. The Uber case brings up thorny questions around when pushing legal or policy boundaries becomes a public hazard rather than public benefit.

Permission Or Forgiveness

"We address this in the course in a session I call regulatory permission, forgiveness, or neither?" says Weiss. "Boston was one of the early cities where Uber was allowed to operate. I ask students whether they think we did the right thing."

Other aspects of working with government, such as requirements for openness and public scrutiny, could be seen as opportunities as much as impediments.

"Nowadays, companies are desperate to have a huge community of innovators looking at what they are doing and offering ideas," says Weiss. "For centuries government has naturally engaged people in what it is doing. Government should be naturals at crowdsourcing."

In exploring these challenges and opportunities, Weiss believes the public entrepreneurship course can help make working in government a viable alternative for innovators looking to effect real change. Noting that HBS offered pioneering courses in private entrepreneurship and social entrepreneurship, he is hoping that eventually public entrepreneurship will be seen as just as legitimate a field of enterprise.

"For 200 years, we've had a sense of how private entrepreneurship creates and delivers value, and for the last 20 years, we've seen the development of the idea of social entrepreneurship," says Weiss. "I told my students on the first day of class [that] we didn't invent public entrepreneurship, but together we could help make public entrepreneurship the third leg of that stool. We could help show the huge opportunity that exists in government to invent a difference in the world."

Post A Comment

In order to be published, comments must be on-topic and civil in tone, with no name calling or personal attacks. Your comment may be edited for clarity and length.

Ed Rule

President, Naval Systems, Inc.

Great examples and an important theme with the potential to span traditional partisan divides. Yet, important that we consider the "business model" and the "incentive structure" if we expect the government to become institutionally, systematically innovative and entrepreneurial. I dabbled in entrepreneurship before spending 20 years in the Navy, then starting my own business selling services to the Navy. I am very familiar with bureaucratic government impediments to innovation and organizational agility. I am also very familiar with many extraordinarily innovative solutions to national security problems and actual warfare challenges that were developed and deployed at remarkable speed an relatively low cost by government engineers in labs and test centers working often in partnership with private industry in some form or another. But how do we sustain a government innovation engine? It has to be more than charisma
tic leadership, vision and good intentions.

Where it exists, competition has proven a huge driver of innovation and delivery speed, with tremendously beneficial effect whether in private industry, government agencies, or their combination. Conversely, monopolistic/monopsonistic environments, whether in public or private institutions, thwarts efficiency and innovation. Competition offers choice to the user, even if the user is a Warfighter. Within DoD, a business model proven effective at promoting innovation and entrepreneurship is called the Working Capital Fund. Its broader application in a way that promotes healthy competition within and between government agencies for solutions to common problems can infuse innovation and entrepreneurship throughout the "system."

Zufi Deo

Founder, www.bizstuff.co

Its great to read about how entrepreneurial mindsets can be used in other environments. However, a concern I have is the nature of a bureaucracy.

It can and will stifle the entrepreneur and the innovator. It would be great if the course were to prepare the students to cope and manage this aspect as well.

Best of luck.

John Carlisle

retired, JC Partners

Why this obsession with competition? It is simply not substantiated. The most innovative organisation the USA ever had (I am British) was Bell Laboratories. Seven Nobel prize-winners. SPC from Shewhart that the Japanese successfully adopted to overtake the USA in manufacturing quality and productivity. So, what did you do? Broke it up in the name of competition!
Competition is a USA ideology. It is time it was really tested.

Tony

VP Operations

This mindset produces a major contradiction that must be pointed out.

Consumers reward entrepreneurs that develop products and services using the factors of production to create value that had not previously existed for the consumer. This is done voluntarily.

Government has a massive agency problem, uses force to achieve its goals and is unaccountable to the consumer - the opposite of what entrepreneurs achieve and what consumers want.

Blending the voluntary nature of the market and entrepreneurial structure with the force of government has been tried before and failed miserably time and again.

Tim Gieseke

President, Ag Resource Strategies, LLC

My experience tells me the next innovation of government is governance. The evolution from hierarchy to network to shared governance is now far more effective in the interconnectedness of society. The challenge for the government is , is it willing to be innovative enough to give up some of its bureaucratically-held turf for a more effective governance model.

ASHWIN HURRIBUNCE

SELF-EMPLOYED

While the theory is plausible and the examples are more exceptions than the rule, entrepreneurial approaches to managing government and for it deliver it mandate to its citizens requires a relatively risk averse environment, something that is not characteristic of governments around the world.

At the fundamental level, governments should be facilitators and not primary deliverers.

Aim

Drilling Supervisor, KOC

Mr. Weiss,

"Why Entrepreneurs Should Go Work for Government"

Because Government means:

"A government is the system by which a state or community is governed.[1] In the Commonwealth of Nations, the word government is also used more narrowly to refer to the collective group of people that exercises executive authority in a state.[2][3][4] This usage is analogous to what is called an "administration" in American English. Furthermore, government is occasionally used in English as a synonym for governance.
In the case of its broad associative definition, government normally consists of legislators, administrators, and arbitrators. Government is the means by which state policy is enforced, as well as the mechanism for determining the policy of the state. A form of government, or form of state governance, refers to the set of political systems and institutions that make up the organisation of a specific government." - Wikipedia.

And Entrepreneurship means:

"Entrepreneurship is the process of starting a business or other organization. The entrepreneur develops a business model, acquires the human and other required resources, and is fully responsible for its success or failure.[citation needed] Entrepreneurship operates within an entrepreneurship ecosystem." - Wikipedia.

What could possess an HBS faculty to ask such a question is beyond me. Is this why the HBS gave way to Stanford last year?

Best of luck,

Aim

Enivah Mutsau

Director Tourism Policy and Research in Government, Government

Governments are faced with too many challenges today such as diminishing resources, impacts of climate change, increase in conflicts between nations, increase in poverty and the like such that a change of mindset on the part of government in trying to solve these problems will be very much welcome. We are not expecting these problems to be solved by the very same people who created them and through the same system that has continually failed us. Entrepreneurs in Government will work as change agents and try to reduce that bureaucracy to a more efficient and flexible system. We can at least start by introducing those in economic ministries such as trade, tourism , transport logistics and small enterprise ministries.

Kapil Kumar Sopory

Company Secretary, SMEC(India) Private Limited

To me it seems that the role played by the Government is essentially policy making and implementing it on its own but more by involving the quasi/non-government agencies. In view of this, responsibility and accountability standards are different. The corporate world has the sole aim of growth with profit and hence has got to regularly innovate or perish - it can't obviously go for the latter.
The other important consideration is the mindset of employees. While a government job is generally secure leading to somewhat relaxed working style, it is just reverse for the private sector. There it is " do or die " and " hire and fire". Hence, the private sector staff has to be always on its toes to deliver results. The promoters of private corporations having invested funds would never remain content if they do not get adequate returns.
Meeting demands of stakeholders is very important for all but the private sector does not ignore it as total satisfaction of clients and others is paramount.
With the present government in India, welcome changes in governmental functioning have started taking place but it is a long way to go. It needs massive effort to reverse the crystallized conceptions of taking things easy due to rather lax administrative controls.

Abdilda Shamenov

Deputy general director, Technology commercialization center LLC

Great article! As for me real entrepreneurs are leaders and we need leaders everywhere including the government sector. Also as in business where customer feedback could be great source for innovation I believe governors should use the same approach asking ordinary citizens how they would like to improve their own cities.